Euro Currency will not make it

By

Sampson Iroabuchi Onwuka


Euro will not make it and I expect it to break up earlier than you think. I believe the currency had to go since it posseses the dark roots of our current problem of devaluation in global stock markets. The optimium currency will not survive because it levelled out the playing field for would be users, making it impossible for the lines of profit to loose contrast in one member state and for all 16 countries.

Ireland, Greece, Croatia, Hungary, Bulgaria and other East European countries are all in trouble. The question is was Robert Mundell correct in his assessment of unified currency or was he in any to blame for the problem of the Europe? Why would these countries who did so well in the past crumble so fast? The answer is this simple, these countries were export depended countries whose existing market forces had part of the overall global market, still in part existed for at least two hundred years. It is part of an on going recycle.

In a essence, if the market co-efficience of the normal world say X is acting outside the current market co-efficience say X1, so arbitrary market function X minus existing market co-efficience X-X-1. The differential equation is demonstrably inverse, which will be X+1. In order to remove the arbitrary nature of the negative market function, you can set function to X(x-1)(x+1) the resulting answer will be X-1, X-n, where n is any number of states.

Bringing these countries together would have been a way forward, but the rest of the world did not disintegrate so the absolute value of X for the rest of the world remain the same inspite of the excision. So you are looking at X-n16 equation, where X is the absolute value for recurrent market condition, and X-n16 which is the Euro becomes an independent evolution of a variable within an absolute X equation. Call it a self destructive Virus.

So the mathematics is wrong from the beginning, and would in teh long run developed its own agenda were it not for the attempt to preserve existing market forces preeminent in these markets, like Tax, Mucipal bonds, Fiscal Policy, and so on. These operational forces are set individually by member states, with or without influence from the other groups.

What happens when you do this is that you roll the clock backwards, for instance Soveriegn Debt and Wealth existing in bigger countries like England, France, and Germany become seriously disaffected to overall income capacity and disproportional to existing member state or member states. As such what happens in any of the member states will easily carry over to her neighbours without creating an interactive equilibrum.

If opportunity is levelled out with an optimium currency, at the same time existing power magnates like Germany and France are exhiting disaffective symptoms, then market on one side of the continental channel like East Europe is forever straddled in between thier regional balance sheet and thier the power brokers from Western Europe.

For instance, most parts of Europe as we know it are saturated by Banks, but much of these banks are default on payment owing to huge inflationary pressures, but 60% shares of Banks from East Europe to begin with are owned by Western Europe, which before 1999 introduction of the optimum currency was a way of copuling and decopuling and archiving stability.

In good times, East Europe was measured by standards applicable in the West to begin with and, even when it is more obvious that standards of living are different, East Europe survived on their own. But as soon as the whole continent of 16 members began to level out play, the economic nerves already evident in these countries created inflation and inflationary pressures. While some parts of the West Europe had power to survive, East Europe couldn't, they could not have given the ballade of economic strenght coming in from teh West.

When times became bad, the default on this Banks in say Eastern Europe became what someone called double default whose rate is fitted into West European banks. Then came the issue of American economic breakdown, which altogether compounded the problem of Europe making it impossible for money to shift ground in Europe. But why? why did all these take place? why did a once vibrant European economy suddenly divulged, then plummetted? This is the question I will like someone who knows to tell me.

Euro will not make it and the earlier they realise that this is the case the better for the world. ECB should think of Euro in terms of grouping strong currencies together with a sharp window for interaction called 'stability pact' and a door called 'guaranteed credit', an exercise no different from uprooting old trees from thier base in order to transplant them. If they were still nursery it could have been possible, but the roots are well fitted in thier stead and had yielded fruits in thier own home. The hope of uprooting this plants to transplant is a good endeavor, but by so doing the plant give away its essence and then its decline. But do not act surprise, since it is only the case, that old roots rot in a new field.


Iroabuchi Onwuka